OPM planning how to automate pension processing

Sep. 21, 2012 - 01:45PM
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OPM Director John Berry said a plan to digitize personnel records and automate pension calculations will be included in the president's proposed 2014 budget. (Thomas Brown / Staff file photo)

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The Office of Personnel Management is hatching a plan to digitize personnel records and automate pension calculations.

That project will be included in the president’s proposed 2014 budget, which will be released in February, said OPM Director John Berry at a Senate Homeland Security and Governmental Affairs subcommittee hearing Wednesday.

OPM has struggled for years to convert today’s paper-based system of calculating retirees’ pensions. About $100 million has been wasted over two decades on several such efforts, with virtually nothing to show for it. Berry said his goal is to eventually have pension processing be completely electronic, though he did not say when he hopes to achieve that goal.

“It’s incredibly crazy that it’s not already” fully electronic, Berry said. “We can’t keep going like we’re going. We’re stuck in this paper-pencil process because the records we have aren’t automated in many cases.”

Berry said some records now have electronic components, but the majority are still paper.

OPM has been working with Federal Chief Information Officer Steven VanRoekel and information technology experts at the Office of Management and Budget to come up with a new strategy for digitizing these records once and for all. Berry said Kathy Dillaman, a senior policy adviser at OPM who previously helped turn around the agency’s sluggish security clearance investigation process, is also working on the plan, which will feature short-, medium- and long-term goals.

Paper personnel records have long undermined OPM’s attempts to calculate new retirees’ pensions quickly. Some personnel folders are missing documents, forcing OPM staff to hunt down those files from the agencies where they were kept. And many pages in those personnel files have handwritten notes scrawled in the margins, or sticky notes, with important information attached. Often, those handwritten notes are illegible, creating another roadblock to quick pension processing.

OPM said last year that agencies currently scan all new employee records immediately to create electronic file folders. And OPM has triaged its scanning of older records to focus on employees who are likely to retire within the next five years.

Eventually, OPM wants agencies to begin tracking service records, salaries, possible law enforcement history and other employee information as structured data — pure information entered into a computer that bypasses the need for paper records that must be scanned.

The Agriculture Department’s National Finance Center in December 2010 became the first payroll provider to begin submitting structured data to OPM, and others are expected to follow suit in the next few years.

Bill Zielinski, OPM’s former associate director of retirement services, told Federal Times last year that kind of data is vital if OPM is to truly automate the pension process.

OPM’s last major effort at automating the pension process died in 2008 after the RetireEZ system created by Hewitt Associates failed numerous tests. OPM spent about $21 million on RetireEZ before canceling the contract.

After taking over OPM in 2009, Berry said he wanted to simplify the agency’s pension automation strategy — primarily by getting rid of the online calculator that was part of RetireEZ — and focus solely on modernizing and digitizing the government’s paper-based system.

Federal retirees often wait six months or more to receive their complete pensions, and many have to tap into their savings or Thrift Savings Plan accounts to cover their expenses in the meantime.